The Seattle Symphony has dodged a huge fiscal iceberg, it announced Monday, citing extraordinary fundraising efforts that fended off a projected $2.5 million deficit on a $22.5 million budget for the 2006-07 season. Instead of a big shortfall, the orchestra is expected to balance its books for the first time in several years — an outcome that new Symphony executive director Tom Philion calls “tremendously exciting news for us.”

Where did the money come from? It was raised in a six-week span following a challenge issued in May by the Seattle Symphony Foundation, which manages the orchestra’s $33 million endowment assets.

“The Foundation wanted to help us leverage other support and stimulate extraordinary giving,” Philion said from his office at the Eastern Music Festival (North Carolina), where he steps down from his post as CEO this Saturday. He returns to Seattle Aug. 1.

“They made a $1.6 million challenge to us, to match on a dollar-for-dollar basis that amount between early June and end of 2007 calendar year. We went to ‘friends and family,’ sat down and asked for extraordinary help to narrow the deficit this year. We were able to raise just under $1.3 million in those requests, matched by the same amount from the Foundation. So that is where the $2.5-plus million came from [to balance this season's budget].”

Philion, who has been in his Seattle post for only three months, said that the health of the stock market was a factor in the returns on this year’s endowment investments. “About 20″ individuals, foundations and/or businesses were involved in making matching contributions.

Another big help: the success of ticket sales, including this month’s “Carmina Burana” performances, for a record box-office total of $11,473,000.

The orchestra still has a leftover accumulated deficit of about $3.2 million. Philion says that with board Chairwoman Susan Hutchison and other key board members, the Symphony has evolved “a three-pronged plan: first was the immediate work to reduce, narrow or eliminate the deficit for the current fiscal year; second, to go out and raise money to help address the accumulated losses of the recent past; and third, to address the concern that the SSO is undercapitalized. We need to raise substantial endowment assets so we can generate enough income to capitalize core operations.”

Philion said most major orchestras use a benchmark figure of four to five times the size of the operating budget as a desirable goal for an orchestra’s endowment.

“Obviously size of endowment is related to what the city will support, and we’re not there yet. We still have a huge amount of work to do,” Philion said.

The orchestra will be back in action for the season-opening gala on Sept. 15 with Gerard Schwarz conducting and Yo-Yo Ma, cello soloist. Concert tickets are sold out, but gala packages are available. Call 206-215-4834 or go to www.seattlesymphony.org for details.

Melinda Bargreen: mbargreen@aol.com. Melinda Bargreen has been writing about music for local and national publications for four decades; she also is a composer, and the author of "50 Years of Seattle Opera." Her new book, "Classical Seattle," is due out this fall from the University of Washington Press.